We’ve explored different types of innovation bets that market leaders are employing to differentiate themselves and their products and services in the marketplace. For GE it was using the momentum and reach that its size affords. For Tata Group, it was tapping into a network of expertise that exists within and adjacent to its enterprise. For Samsung, establishing a compelling vision and putting the investments in place to realize it produced results. And more recently Virgin, as represented by the Virgin Green Fund, demonstrated the power of collaboration in increasing a return on innovation investment. At last we come to an oddity in the mix ― especially if we consider the chemical sector in relation to sustainability and clean technology ― that company is BASF.
BASF, “The Chemical Company,” is one of the world’s leading chemical companies with over 110,000 employees and over 380 production facilities worldwide. This year BASF is leading the charge in celebrating the United Nation’s sanctioned International Year of Chemistry, in order to promote careers in chemistry to young people and to highlight chemistry’s fundamental importance to society. For some, this promotion of chemistry might seem at counterpoint to previous posts highlighting connections between innovation and sustainability. That would minimize the role that chemistry plays in addressing complex environmental and societal challenges faced by a world population fast approaching 7 billion people.
One of the less well known programs of BASF is their focus on eco-efficiency analysis. BASF’s approach is to fold this analysis into all aspects of the way they execute their business. This program takes internationally recognized standards (ISO 14040 and 14044) for life cycle inventory and life cycle assessment and addresses comparisons of products or processes including all life cycle costs, and ecological and economic aspects, both of which have equal weight in the assessment. The resulting tool has become a standard across the BASF group and hundreds of analyses have been carried out since its development and deployment. One of the key elements is the traceability of the toxicity potential of any product developed from sourcing, through development, manufacture, distribution, and customer use. This data was previously unknown, or at the very least closely guarded, and now is part of the documented assessment of new products.
How does this investment position BASF more effectively?
By innovating in the reporting of the impact of their products BASF seeks to integrate sustainability into all their customer relationships. It becomes a basis for discussing specific customer needs and potential solutions to meet those needs. Correspondingly, by identifying relevant sustainability issues upfront BASF can develop tailored solutions while reduce reputational risks for both themselves and their customers, while delivering value through transparent communication. For BASF operating in this manner gives them a “license to operate.” Without which, their credibility and long-term success are hindered.
BASF doesn’t just innovate in the chemistry they produce, they are innovating their business model and the way they execute business with their customers. By recognizing the broader and systemic impacts of their products they are able to engage with their customers at a deeper level. The added value they deliver by creating a stronger foundation for trust will hopefully pay off in long-term success.
